Couple Pleads Guilty to the Multi-Billion Bitfinex Hack
Ilya Lichtenstein and Heather Morgan
By February 2022, Ilya Lichtenstein, 35, and his wife, Heather Morgan, 33, had attempted to cash out over 25,000 of the 119,754 bitcoin he had stolen from Bitfinex by moving the funds in thousands of transactions through multiple platforms and addresses.
According to court documents, investigators established that after hacking into Bitfinex, Lichtenstein initiated 2,000 transactions that moved the bitcoin into a wallet under his control.
The couple started moving the funds in January 2017. They sent a portion of the funds to multiple accounts at the now-defunct dark web marketplace, AphaBay. From AlphaBay, the funds were sent to accounts under fictitious names in a US-based cryptocurrency exchange. From the exchange, the funds were moved through multiple platforms and addresses before ending up in accounts registered to either Lichtenstein and Morgan or their shell companies at multiple crypto exchanges.
How the couple moved the stolen funds
In most cases, Lichtenstein and Morgan sold the crypto and withdrew the funds into bank accounts under their control. In other cases, they cashed out through bitcoin ATMs or by purchasing prepaid gift cards. In one instance, Lichtenstein purchased gold coins and had them shipped to his home address.
In 2021 the investigators acquired a search warrant for an email address linked to Lichtenstein's account on one of the crypto exchanges. The cloud storage of the account contained encrypted files. The investigators managed to decrypt some of the files on January 31, 2022.
One of the files contained a list of 2,000 addresses and their corresponding private keys. The addresses were the recipients of the 119,754 bitcoin stolen from Bitfinex. The investigators seized a total of approximately 94,636 bitcoin from the addresses.
The account also had a spreadsheet, with the login credentials to accounts at multiple crypto exchanges. Most of the accounts had received the stolen funds. Litchsten had labeled the accounts as either frozen or emptied.
Litchsten also kept a folder with the IDs and personally identifiable information of numerous individuals. He also maintained a list of darknet ID vendors.
The couple was arrested on February 8, 2022. The government has reportedly seized an additional $475 million since the couple's arrest.
Morgan pleaded guilty to one count each of money laundering conspiracy and conspiracy to defraud the United States. She faces a maximum of five years in prison for each charge.
Lichtenstein pleaded guilty to conspiracy to commit money laundering. He faces a maximum of 20 years in prison.
Comments (31)
Cilantro2023-08-074c8c06ba
Are these these some of the artist featured on the Kilos: A darknet Story, soundtrack? Soundtrack is epic. If anyone can teach me how to upload I will share, as their hidden service/onion/ is down.
NiceTryUScammer2023-08-285e16966e
Their hidden service is down because kilo exit scammed many months ago you faggot.
btc to xmr to btc2023-08-0734f07ed4
for someone who can pull out such a sophisticated hack and obviously knows what he was doing, and with such a high threat model, its baffling that he did not at least convert bitcoin to monero then to bitcoin before distributing them to his other wallets (shown in pic above).
JoeMamma2023-08-2110eee590
It's not baffling. Cleaning coin with monero doesn't work when the sums are too large. In 2017 monero was barely off the ground and had limited distribution. Its priced averaged $75 with an average maketcap of 1.1 billion. Meanwhile in 2017 the price of bitcoin skyrocketed from $900 to 20k reaching a marketcap of 100 billion at its high which is probably what prompted these two to start cashing their chips. Attempting to move hundreds of millions in bitcoin into and then out of monero market cap of a billion would have the effect of swelling then depleting its marketcap value by one fifth. It would not have had the obscuring effect you think it would have because it would have stood out like a sore thumb. Using the side channel attacks against XMR developed by chainalysis the end result would have been the same, they could have tracked their transactions into and out of monero to a high degree of probability due to the volume being moved being far too large to obscure.
transmaomao2023-08-08c58a2497
damn no wonder mempool is so quiet these days. crypto as a retainer of value is still a ponzi scheme though :3 blockchain has limited use-case :3 crypto is for drugs gang
Ihavenothing2023-08-087b793ec7
Roughly 4.6 billion in GBP!?!! Fuck me, so gutted they didn't get away with it. Imagine after 2 years you'd think you would have escaped and started to live your best life, and then 3 years after that, LE knocks on your door! That sounds like pretty shit luck.
Satan2023-08-21a44482dd
Yeah like the feds wouldn't have gotten tipped off to a cash out that large via cash by mail. Get real. By 2017 they were already squeezing cash by mail vendors threatening them with money laundering charges unless they gave up their client list. They would have gotten wind of it.
sudo2023-08-084105b7ee
conspiracy to defraud the United States? sounds familiar. get fucked trump you faggot
nahimgood2023-08-080348cbaa
So was smart enough to basically tumble the bitcoin and funnel it through multiple wallets, but not smart enough to not keep a spreadsheet that listed out literally all of their accounts?
gatheryefinks2023-08-148d2bc33f
Definitely a good catch in the indictment. The fact that they managed to decrypt the files is also a questionable bit.
SuckMyFuck2023-08-0971504225
Bro unless you live in Russia or china, there’s no way in hell you’re getting away with stealing billions as a sole hacker/non political entity. Just another example of scummy people getting what scummy people deserve.
Nobody2023-08-187e86b391
That may be well and good, but I have always loved a good story of the lone hacker that got away.
Avocado2023-08-098ad30519
Plenty idiots do not convert to monero. Now will loose everything plus 30yr in jail with niggas in their ass. Two Retards.
Mudd2023-08-10607bca31
The woman has been characterized as a "cringe rapper" and this is dead on the money. It makes you feel like a stepped on worm to watch her music videos. Actually, her lyrics weren't so bad but her singing and musical talent were near zero and painful to watch. Lot's of time to perfect her craft sitting at home attached to an ankle bracelet now. Hubby wishes he were so lucky.
12345692023-08-12146d4324
Wow, that's an amazing amount of money. If I had even a tiny percent of that much, the first thing I'd do would be move to another country.
King Koopa2023-08-162c913936
The people dumb enough to go through will pulling this off are also dumb enough to get caught on the rookiest of moves, not washing it through monero
Nobody2023-08-18da13f326
They could have gone to letsexchange.io-converted btc to xmr, then back then back then forward then back then up down left right A/B/A/B XY. Fucked up they didn't think of how to hide the money better. It's easy to fall into the trap of such thinking when you're sitting in your underwear drunk as fuck thinking nobody sees your PC.
learnTokenomics2023-08-21144fa654
God u all have groupthink in these comments are too stupid to understand that shit would not have worked in 2017. Monero wasn't big enough.
putintang2023-08-254725a9a1
For being so smart they where awfully fucking stupid , I guess they really didn't understand the concept of the bitcoin blockchain.
wasabi2023-09-123474a77e
Wondering why they didnt blender/mix their money , theres so many services, even in Telegram if you open you can find a lot of russian/ukrainian people who offering cleaning the money using their "pre-paid drops" people, and their own personal banking details, plus western union transfers also possible.. In china several stores accept BTC as a payment, plus UAE... they could buy/sell cars and not necesserily using their own identity (you can buy any docs in here) I mean they could have so many options to clean some part of money and run to freaking Hong Kong or Thailand and live happily ever after, flying to Europe and cashing out ATMs until they turn 90s)) thats crazy...
asfkj2023-08-07b9aa8ab4
biggest bag fumble of the century lol shame on them